Ottawa Business Growth Survey 2021

2021 AN EXCLUSIVE REPORT ON THE OUTLOOK AND ATTITUDES OF OTTAWA’S BUSINESS LEADERS

Building back better THE OPPORTUNITIES FOR BUSINESSES IN A POST-COVID OTTAWA

BROUGHT TO YOU BY

2 THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021

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FOREWORD

Recovering and prospering together Now in the second year of the pandemic, we continue to see the people of Ottawa adapt and come together to support local business and the community at large. It continues to be a challenging environment for many parts of the economy, however, we have also seen great resiliency and innovation from our local businesses.

The 2021 Welch LLP Ottawa Business Growth Survey shares valuable insight from the business community. With this information, we will continue working together to navigate the economic challenges and to grow from the experience.

We thank our presenting partners Ottawa Business Journal, the Ottawa Board of Trade and Abacus Data. We also thank sponsors RBC, Perley-Robertson, Hill & McDougall LLP/s.r.l., Le Regroupement des gens d’affaires de la Capitale nationale (RGA), Sprott School of Business at Carleton University and Taggart Realty Management for their generous support.

We also thank the Ottawa community for your perseverance, ingenuity and strength during this period – we will recover and prosper together.

Jim McConnery Managing partner, Welch LLP

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A year full of lessons learned On behalf of the business community, the Ottawa Board of Trade is grateful and honoured to partner with the businesses and organizations who have come together to present the 2021 Welch LLP Ottawa Business Growth Survey. Perhaps more than ever.

Simply stated, the need for data-driven decision making is a hard-won lesson from this past year. And so, I would also like to thank the business leaders who made the time to submit the information that led to these results.

In our advocacy work at all levels of government over the last year, the Ottawa Board of Trade referred often to the Welch LLP Ottawa Business Growth Survey to support policy and program recommendations. And I am certain we will be using these newest results as we continue to fight for business support and investments for a strong rebound.

It has been a game-changing year for businesses, communities and governments. When I wrote this piece for last year’s report, I indicated we were at the peak of the pandemic. Not quite right!

However, I am confident that we are now in the end game.

We have learned many lessons about living with COVID and mass vaccines are imminent. However, we must ensure the level of collaboration, evidence-based decision making and high responsiveness we used during the pandemic continues to ensure a successful recovery.

The impact of the countermeasures deployed to reduce the spread of the virus has been different for many businesses, entrepreneurs and employees. Some have thrived while others have been devastated. We must continue to invest in the small businesses and hardest-hit sectors to bring everyone along, especially those businesses who have been at the front lines of this fight. In addition, we must focus on new opportunities to accelerate results on inclusion and sustainability for long-term economic growth.

Thank you to all our businesses for your resilience, innovation, and adaptability. We applaud you and will continue to support your future success.

Sueling Ching President and CEO Ottawa Board of Trade

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FOREWORD

Businesses prepare to enter the ‘flexibility era’ On behalf of the entire team at Abacus Data, it is a privilege to present the findings of the 2021 Welch LLP Ottawa Business Growth Survey – the ninth time we have been the research partner for this important study.

It has become cliché to say that these past 14 months have been unprecedented. As we emerge from the third, and worst, wave of the pandemic, all of our lives have been deeply impacted.

We feared for the safety of our loved ones. We worried about the capacity of our health system. We miss friends, family and the simple pleasures we took for granted before this all started. For business leaders in Ottawa, the pandemic has forced us all to reset and recalibrate. To challenge our assumptions, pivot our thinking and readjust our plans.

This year, business leaders from across the National Capital Region completed our survey and shared their experiences through this difficult time. The goal of the annual study is to obtain an accurate picture of the current state of our city’s economy through the eyes of business leaders. We seek to understand perceptions and expectations while identifying areas where collectively all stakeholders can make the city a better place to grow a business. The survey also gives us insight into new and emerging trends.

Last year, our survey found a massive drop in business confidence.

For the first time since we started this

project, our business confidence index dropped below 100 and into negative territory. I’m pleased to report that this year, confidence has rebounded back to 100. Not quite where we were before the pandemic, but a big improvement.

Other key findings include: • Half of business leaders say the market for their business sector will improve over the next year, a 33-point increase from 2020; • 46 per cent of business leaders expect to recruit new employees in the next 12 months, up by 21 points over last year; • But almost half say confidence in the local economy is lower than it was a year ago. Things are improving, but we still have some work to do.

The survey also explored how businesses in our city plan to operate post-pandemic.

Many leaders expect to spend far more time working remotely than they did before the pandemic. About one in four say they have or would consider hiring an employee who lives outside the National Capital Region and having them work remotely.

We are entering the “flexibility era” where our workplace cultures and policies will need to reflect changing preferences when it comes to where and how we work in the future. This will put pressure on commercial real estate in the city as 30 per cent of business leaders say that over the next five years, they would likely shrink their organization’s office, retail or other

TITLE SPONSOR

Audit

Tax

Accounting

PRIMARY PARTNERS

commercial space footprint.

We also asked what policymakers should prioritize in the post-pandemic recovery. Increasing domestic manufacturing capabilities, greater investments in healthcare and medical research, retraining and education, and an accelerated shift to a digital economy topped the list.

Abacus Data, a full-service Canadian market research firm based in Ottawa, carried out the survey from March 1 to April 11, 2021 and a total of 562 business leaders responded to the survey.

Respondents were recruited by email and website intercept by the Ottawa Board of Trade, the Ottawa Business Journal and Welch LLP contact list. Members of BIAs from across Ottawa, the Better Business Bureau, BOMA, the Ottawa Construction Association and the National Capital Heavy Construction Association were also invited to participate.

Thank you to every business leader who took part in our survey. Your input makes this study possible. Wishing you all the very best as we recover from the crisis and rebuild stronger.

David Coletto CEO, Abacus Data

RESEARCH PARTNER

Consulting

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6 COVER STORY

BUILDING BACK BETTER: THE OPPORTUNITIES

TO RETHINK THE WAY WE WORK, ENGAGE EMPLOYEES AND CREATE A STRONGER CITY

9 BUSINESS CONFIDENCE

MARKET OUTLOOK, HIRING PLANS

AND FINANCIAL PERFORMANCE

15

CHANGING HOW WE LIVE, WORK AND PLAY

SHIFTING REAL ESTATE DEMAND, OFFICE SPACE PRIORITIES AND CONSUMER SPENDING

23

THE POST-PANDEMIC ECONOMY MANAGING REMOTE WORKFORCES,

ADJUSTING EXIT STRATEGIES AND PRIORITIES FOR POLICYMAKERS

35

RESPONDENT PROFILES

Editor’s note: Some results on the following pages may not add up to exactly 100 per cent due to rounding.

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COVER STORY

BUILDING BACK BETTER: THE OPPORTUNITIES FOR BUSINESSES IN A POST-COVID OTTAWA A permanent shift is underway in the way we work, connect with clients and think about our city as a whole

BY LISA THIBODEAU lisa@obj.ca

E

mpty office buildings, shuttered restaurants and makeshift workfrom-home arrangements were hallmarks of Ottawa’s economy over the past year.

There’s widespread optimism that will soon change. With a mass vaccine rollout expected this summer, many hope the economic recovery already underway in some sectors will expand to the industries hardest hit by COVID-19.

But relatively few observers believe the city’s business community will simply revert to its pre-pandemic form. There are already signs of a permanent shift in the way we work, connect with clients and think about office space, opening a virtually unprecedented opportunity for the city’s business leaders.

The 2021 Welch LLP Ottawa Business Growth Survey explored how the city can build back better – taking the lessons

learned during the pandemic and applying them to create a stronger, more vibrant Ottawa.

Local companies are investing in digital tools and e-commerce platforms to reach new customers as many employers creatively help employees achieve better work-life balance through flexible arrangements.

And, as the wider economy reopens, landlords and urban planners are eyeing ways of reanimating downtown Ottawa and other urban neighbourhoods.

While there are undoubtedly more challenges ahead, this year’s survey of local business leaders paints a picture of optimism and a new phase of economic growth in the capital, says Jim McConnery, managing partner at Welch LLP. “Business leaders really drive activity in our community, so it’s encouraging that there is a sense of hope,” he says. “That can translate into actual investments in the economy, which will help us bounce back stronger.”

STRENGTHENING THE BOTTOM LINE Many companies took a financial hit in the first year of the pandemic. More than half of respondents reported a decline in revenues, net income and overall confidence in the local economy.

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KEY FINDINGS

Highlights of the 2021 Welch LLP Ottawa Business Growth Survey

51%

OF RESPONDENTS SAY THEIR CONFIDENCE IN THE LOCAL ECONOMY HAS DECLINED OVER THE LAST YEAR.

44% OF RESPONDENTS SAY THEY PLAN TO RECRUIT NEW EMPLOYEES OVER THE NEXT YEAR.

52% OF RESPONDENTS BELIEVE THE MARKET FOR THEIR BUSINESS SECTOR WILL IMPROVE OVER THE NEXT YEAR. ONLY 10% PREDICT CONDITIONS WILL DETERIORATE.

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COVER STORY

49% OF RESPONDENTS SAY THEIR ORGANIZATION HAS INTRODUCED MORE FLEXIBLE WORK HOURS.

49%

THE AMOUNT OF TIME RESPONDENTS BELIEVE THEY’LL SPEND WORKING AT HOME – ONLY MARGINALLY GREATER THAN THE AMOUNT OF TIME AT A TRADITIONAL OFFICE.

ONE IN FOUR RESPONDENTS SAY THEY PLAN TO SPEND THE BULK OF THEIR VACATION TIME THIS YEAR ON A STAYCATION, VISITING LOCAL ATTRACTIONS.

52%

OF RESPONDENTS SAY THEY APPROVE OF MAYOR JIM WATSON’S PERFORMANCE.

But when asked about their outlook for the future, respondents painted a different picture.

A slim majority say they expect the strength of their sector to improve in the next year – optimism fueled by the government’s extensive stimulus programs and the rollout of the COVID-19 vaccine, suggests McConnery.

He adds that the massive disruption to the plans and forecasts of virtually every business over the past year – combined with lingering uncertainty – has changed how many companies are approaching budgeting.

McConnery says managers and executives are reviewing their balance sheet and cash-flow positions more frequently as well as adopting more scenario planning into their forecasts.

And, after riding a roller coaster of public health restrictions and changing consumer patterns, many businesses are emerging from the pandemic with more resilient operating models.

The wider adoption of e-commerce platforms and a stronger digital presence will help businesses in the city rebuild, says Sueling Ching, president and CEO of the Ottawa Board of Trade.

“Digitization has accelerated 10 years in the last 12 months,” she says. “Companies are realizing how important online marketing and sales tools are to surviving in a post-COVID world.”

While some companies saw the switch to virtual business as a temporary solution during the pandemic, digital tools for sales, meetings and daily operations are becoming permanent fixtures in most business sectors, adds Andrew Arnott, regional vice-president of RBC. “We are seeing businesses in Ottawa and across Canada invest in consumer‑facing digital platforms and information technologies that expand digital infrastructures,” says Arnott. “This will support online sales and their employees working remotely, which will ultimately help to build back in a stronger capacity.”

PRIORITIZING EMPLOYEE WELLNESS The pandemic also sparked a renewed focus

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on work-life balance.

As employees juggled new childcare responsibilities while working from home, employers were forced to re-examine their internal operations to introduce more flexibility.

Half of respondents say they adopted more accommodating arrangements regarding work schedules, a trend that will continue post-pandemic, says Dana Brown, dean at Carleton University’s Sprott School of Business.

“Employers are quickly realizing it’s not just about switching your business to Zoom meetings. You actually have to revisit your style of work,” she says. “This is an unprecedented opportunity to tear down the workplace structure and build it better.”

Companies can no longer measure productivity by the number of hours an employee spends at the office, but are instead focusing on the end result – creating more trust between employers and staff.

Such a shift is also prompting changes in managerial mindsets.

Companies can no longer measure productivity by the number of hours an employee spends at the office, but are instead focusing on the end result – creating more trust between employers and staff.

And, with respondents expecting to divide their workweek between home and the office once the pandemic subsides, flexibility in the workplace will continue to positively impact the way we work.

“COVID showed us that we could be approaching work in a much better way,” says Ching. “We can’t just look at these lessons and move on without taking action.”

The shift to remote work is also changing

THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021 7

It’s encouraging that there is a sense of hope.

– JIM MCCONNERY, MANAGING PARTNER, WELCH LLP the composition of workforces employed by local organizations. For jobs that can be performed remotely, many employers are finding that they’re no longer restricted to looking exclusively at the local labour pool.

More than a quarter of respondents say they would hire – or recently hired – a candidate living outside of the region, while another 20 per cent say their company already employed remote workers living outside of Ottawa.

A NEW URBAN LANDSCAPE The forced – and, for many organizations, ultimately successful – work-from-home experiment is prompting business managers to rethink the role commercial office space plays within their organization.

The lack of in-person interaction in the last year has pushed businesses to think about the office as more than just a place to work, but as

a catalyst for collaboration and teamwork.

Providing employees with safe workstations and great shared spaces will be a priority for many managers, says Timothy Thomas, a partner and real estate lawyer at Perley-Robertson, Hill & McDougall.

“There’s a new checklist developing for office amenities,” says Thomas.

“Government offices and local businesses are moving away from the cramped modular setup in favour of a more spacious layout,” he adds, noting that this might result in some organizations increasing their overall office footprint with a reimagined floor plan.

COVID-19 is having a lasting impact on where and how we work, creating fresh opportunities to inject a new vibrancy into the downtown core.

As the nation’s capital, the city should be pushing architectural boundaries and looking at how to reimagine Ottawa’s cityscape. That could include boldly

designed buildings and 15-minute neighbourhoods in which daily essentials and amenities are within easy walking distance, says Julie Taggart, vice-president of leasing and operations at Taggart Realty Management.

“We need to see more density in the core and more usable green space,” she says.

“Now more than ever we need attractions to draw people into the city.”

The expansion of Ottawa’s light-rail line, emergence of the new Zibi waterfront community and renewed focus on redeveloping LeBreton Flats presents an opportunity to invest in fresh ways of drawing tourists and engaging local residents.

“We’ve got to talk to one another in the community and figure out what our identity is and what we want for the city,” says Brown. “There’s a real opportunity here for positive change, but it’s one that could be lost if we don’t grasp it.”

KEEPING YOU CONNECTED

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NEWS UPDATES EVERY WEEKDAY // VISIT US DAILY AT OBJ.CA 8 THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021

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BUSINESS CONFIDENCE • CREDIT CONDITIONS • REVENUE AND NET INCOME • HIRING INTENTIONS • MARKET OUTLOOK

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BUSINESS CONFIDENCE

The past year has been – depending on your sector – one of crisis, or change and adaptation.

– DAVID COLETTO, CEO, ABACUS DATA

LIGHT AT THE END OF THE PANDEMIC TUNNEL – FOR SOME

A

fter collectively taking a financial hit over the past year, confidence among Ottawa’s business leaders is on the rebound amid growing optimism that market conditions will improve over the next year.

Ottawa’s business confidence index crept back into positive territory this spring in a partial recovery from the shock that the COVID-19 pandemic initially sent through the economy roughly a year earlier.

The majority of respondents say they’re

in a weaker financial position than a year earlier, with lower revenues and net income. Nevertheless, there was a sharp rise in hiring intentions – an indicator of an optimistic outlook and expectations of future growth – and a sharp decline in the number of organizations saying they plan to reduce their headcount.

“The worst of the pandemic is likely to be over in the next few months,” says David Coletto, the CEO of Abacus Data. The local market research firm administered the 2021 Welch LLP Ottawa Business Growth Survey and analyzed the results.

Ottawa’s business confidence index:

12 2

12 2

12 5

10 3

11

120

4 .2 11 7 11 9.

2 12 4

150

78

90

60 2013

2014

2015

10 THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021

2016

2017

2018

2019

2020

2021

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BUSINESS CONFIDENCE

Compared to a year ago, how has your confidence in the local economy changed? n INCREASED

n STAYED THE SAME

n DECREASED

80

51%

70

PERCENTAGE OF RESPONDENTS

“Large parts of our economy are bouncing back. Confidence is rising and we’re getting closer to the light at the end of the tunnel,” he adds.

Noting that the survey was largely conducted while Ontario was grappling with a third wave of COVID-19 infections, Coletto highlights that not all industries are seeing that proverbial light.

While the construction and technology industries have a highly optimistic outlook, the attitudes of those in the retail and hospitality sectors – arguably two of the industries most severely affected by measures aimed at controlling the spread of COVID-19 – were considerably more downbeat.

“For the business community, the past year has been – depending on your sector – one of crisis, or change and adaptation,” Coletto says. “The survey really highlights both the struggles that companies have faced over the past year and how many in the city are going to change how they do business.”

SAY IT’S DECREASED

60 50

35%

40

SAY IT’S STAYED THE SAME

30

14%

20

SAY IT’S INCREASED

10 0

S2015

F2015

2016

2017

2018

2019

2020

2021

Sector by sector:

CONSULTING

TECHNOLOGY

HOSPITALITY

CONSTRUCTION

RETAIL

113

127

80

124

90

CALCULATING CONFIDENCE Business confidence is an essential driver of economic growth. Starting, operating and growing a business involves, by definition, taking risks. And businesses are more likely to take risks by hiring new employees, purchasing new technologies and expanding when there’s a belief that it will pay off.

The business confidence index is a composite calculation based on the responses to several of the questions contained on the following pages. The scale ranges from zero to 200, with a score of 100 representing a neutral position. A score higher than 100 is positive, while a score lower than 100 is negative.

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THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021 11

FINANCIAL RESULTS

PANDEMIC FURTHER ERODES REVENUES, NET INCOME Weighed down by more than a full year under COVID-19, respondents to the 2021 Welch LLP Ottawa Business Growth Survey reported a further softening of their top and bottom lines.

After recording a sudden and dramatic drop in both revenues and net income in 2020, the income statements of respondents deteriorated further over the last year. More than half say their sales fell while a shrinking percentage say their revenues grew.

It was a similar story when respondents were asked about their net income.

More than half say their bottom line softened over the past year, while less than one-third say their net income increased.

How has your revenue changed in the last fiscal year?

12%

56%

STAYED THE SAME

DECREASED

30% INCREASED

2% I DON’T KNOW OR NO COMMENT

How has your net income changed in the last fiscal year?

31%

54%

12%

4%

HIGHER

LOWER

NO CHANGE

I DON’T KNOW OR NO COMMENT

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HIRING INTENTIONS + CREDIT CONDITIONS

EMPLOYERS READY TO RECRUIT In the next year, do you plan to…

Hiring intentions among respondents to the Welch LLP Ottawa Business Growth Survey rebounded over the past year to approach pre-pandemic levels.

More than 40 per cent of respondents say their organization plans to expand their employee headcount over the next year, up from 25 per cent in 2020.

An equally striking shift was recorded in the dramatic drop in the number of respondents who say their organization is planning layoffs over the next year – another indicator that many businesses have stabilized their operations following the initial shock of COVID-19.

37% KEEP EMPLOYEE LEVELS THE SAME

44% RECRUIT NEW EMPLOYEES

8% REDUCE EMPLOYEE NUMBERS

12% I DON’T KNOW OR NO COMMENT

CREDIT CONDITIONS TIGHTENING Even with interest rates expected to remain at rock-bottom levels for the foreseeable future, respondents to the Welch LLP Ottawa Business Growth Survey say credit is becoming harder to access.

In a modest shift, nearly 16 per cent of respondents say that securing credit is becoming more challenging. That’s up from 12 per cent last year.

Compared to a year ago, is credit…

16%

HARDER TO ACCESS

11%

EASIER TO ACCESS

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39%

ABOUT THE SAME

35%

I DON’T KNOW OR NO COMMENT

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MARKET OUTLOOK

REBOUND ON THE HORIZON In a dramatic reversal from last year, more than half of respondents to the Welch LLP Ottawa Business Growth Survey say they expect market conditions in their business sector to improve over the next year – suggesting that most believe the worst economic impact of the pandemic is behind them.

In contrast, barely one in five felt the same way a year ago.

How will the market for your business sector change over the next year? n IMPROVE

n STAY THE SAME

n WORSEN

n I DON’T KNOW / NO COMMENT

60

PERCENTAGE OF RESPONDENTS

51%

40

52%

35% 31%

52%

50%

33%

52%

31% 21%

20

9%

10%

10%

19% 10% 10%

6% 0

2017

7% 2018

5% 2019

A tale of two economies Ottawa’s business community remains optimistic about the future, with more than half of respondents saying they expect the market in their sector to improve. But while some industries face a prolonged recovery, others are expected to quickly bounce back – or are already

seeing sales increase – amid shifting consumer and business demand.

Industries tied to housing and household goods, such as those that provide construction, financial and real estate services, as well as building materials, appliances and food are expected to fuel economic

14 THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021

7%

2020

growth over the short term, says RBC regional vicepresident Andrew Arnott.

In Ottawa, manufacturing sales have surpassed prepandemic levels in recent months and the housing market is growing faster than virtually any other Canadian market.

“Sectors like wholesale and transportation are reporting capacity pressures

2021

and labour shortages and therefore need more investment to hire to increase productivity,” says Arnott.

“But while some industries face a prolonged recovery, others are expected to quickly bounce back – or are already seeing sales increase – amid shifting consumer preferences and renewed business demand.”

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CHANGING HOW WE LIVE, WORK AND PLAY • COMMERCIAL REAL ESTATE DEMAND • RESIDENTIAL REAL ESTATE MARKETS • LEISURE AND DISCRETIONARY SPENDING INTENTIONS

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COMMERCIAL REAL ESTATE

SHIFTING DEMAND FOR OFFICE, RETAIL SPACE With many offices and storefronts operating at reduced capacity – or outright closed – over the past year, roughly three in 10 respondents to the Welch LLP Ottawa Business Growth Survey say they plan to shrink their commercial real estate footprint over the next five years.

But at the same time, nearly the same proportion say they plan to grow their physical footprint.

How will your organization’s office, retail or other commercial space footprint change over the next five years?

FT2

FT2

FT2

FT2

30% 25% 40% 6% SHRINKING

GROWING

STAYING THE SAME

N/A

MARKET CONTEXT

Ottawa’s office vacancy rate climbs in early 2021 Tenants in Ottawa’s downtown core and tech hub of Kanata continued to shed office space in early 2021 as the city’s office vacancy rate rose for the fifth quarter in a row, real estate firm CBRE says.

The overall office vacancy rate stood at 9.6 per cent at the end of March, the firm says, up nine-tenths of a percentage point from the previous quarter.

The increase was even more dramatic in the downtown core, where the rate jumped from 9.5 per cent in the fourth quarter of 2020 to 10.7 per cent in the first three months of 2021. Class-A real estate in the core fared comparatively

better, but 7.9 per cent of that premium space is now empty, up from seven per cent in the previous quarter.

CBRE did note that sublease space in the core –​ which skyrocketed last year after major tenants such as Shopify and OpenText vacated properties as the work-from-home trend accelerated ​– declined slightly in the first quarter.

But the firm says the bounceback could be short-lived, with an additional 100,000 square feet of space expected to be returned to the market in the second half of 2021.

As always, the federal government will play a key role in determining the future course of the city’s office market. CBRE says it expects the feds to continue to take a “wait-and-see approach” to their real estate needs.

16 THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021

Changing office lease dynamics The prolonged work-from-home experiment – and questions about where employees will want to work, post-pandemic – is leaving many businesses unsure of their future office needs, says Timothy Thomas, a partner and real estate lawyer at Perley-Robertson, Hill & McDougall.

The results of Welch LLP Ottawa Business Growth Survey suggest a significant shakeup may be on the horizon for the city’s commercial real estate sector, with half of survey respondents saying they expect to either increase or decrease their office footprint over the next five years.

And, as employees increasingly consider a hybrid work model, employers are looking for more flexibility in their leases to try and avoid paying for space they don’t need, Thomas says.

“Business owners are asking for the ability to give up space after a certain period of time, or for a shorter lease altogether so as not to commit to a space they won’t use,” he says. “We may even see the price of office space decrease over time if more businesses explore other options.”

The challenge with shorter leases is that businesses won’t be incentivized to fit up the space in a way that works for them if they aren’t planning on staying long term, which could affect the atmosphere in the office, Thomas adds.

“Increasingly, businesses are going to be looking for move-in ready space with amenities that get employees excited about coming to work,” he says. “They also want to work with reasonable, caring landlords that will take their needs into consideration – especially during times of economic hardship.”

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Retail • Office • Residential New Developments • Condominiums 225 Metcalfe St. Suite 708 Ottawa, ON K2P 1P9 O: 613-237-7000 F: 613-235-8910

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COMMERCIAL REAL ESTATE

OFFICE TENANTS PRIORITIZING COLLABORATIVE SPACE, LOWER RENTS With many organizations rethinking how they use their commercial space, respondents to the Welch LLP Ottawa Business Growth Survey say they’re placing a premium on having space for employees – many of whom have spent more than a year working remotely – to collaborate with one another.

An even higher priority, however, is finding financial savings with lower real estate costs.

What are your organization’s priorities for its commercial real estate space over the next five years? (check all that apply)

37%

PERCENTAGE OF RESPONDENTS

40

29%

35 30 25

24%

20

27% 19%

18%

15 10 5 0

SHORTER LEASE TERM

MORE INDIVIDUAL SPACE FOR EACH EMPLOYEE

IMPROVED DESIGN FOR COLLABORATION

Evolving office needs When it comes to leasing office space, cost efficiency has always been a top priority for employers.

But COVID-19’s impact on how we work has introduced new considerations to the list of must-have amenities, says Julie Taggart, vicepresident of leasing and

operations at Taggart Realty Management.

“Post-pandemic, we’re going to have to remind people why they like coming to the office. That will start with having great common areas for staff to reconnect and have lunch or coffee,” she says. “On-site eateries

18 THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021

PROXIMITY TO TRANSIT

LOWER RENTAL RATE

or cafeterias are also considered a huge bonus.”

Proximity to transit and nearby parking will also remain important, although with more staff exploring a permanent work-fromhome lifestyle, the desire to live relatively close to one’s workplace will be of lesser importance. That’s expected to make living in

AMENITIES FOR STAFF, SUCH AS COMMON AREAS, BREAK ROOMS AND/ OR GYM

neighbourhoods far from the city’s main commercial areas an easier sell.

“People are making decisions to move in the moment during the pandemic, so it will be interesting to see if this trend continues once offices reopen and coworkers can reconvene in person,” Taggart says.

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As you navigate these uncertain times, know that we are here for you.

Get in touch.

perlaw.ca • 613.238.2022

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THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021 19

RESIDENTIAL REAL ESTATE

9% A COMMUNITY JUST OUTSIDE OTTAWA

21%

WHERE OTTAWA WANTS TO LIVE

21%

Large numbers of area residents say they’d like to live in a new part of the city – or even beyond its borders – as the shift to remote work opens opportunities to move without fears of lengthening one’s commute to the office.

While some predicted “work-from-anywhere” opportunities would lead urban dwellers to flee the city en masse in search of larger homes and more personal outdoor space, the results of the Welch LLP Ottawa Business Growth Survey indicate that a large-scale exodus is unlikely – but that area residents intend to be fairly mobile in the coming years.

One-third of respondents living in central Ottawa say they’d like to move outside their current community. The figure jumps to more than 50 per cent among suburban residents.

Yet at the same time, central Ottawa holds the most appeal among those considering a new home, followed by communities on the city’s outskirts.

“The pandemic has allowed people to reconsider where they live and what’s important to them,” says Abacus Data CEO David Coletto. “When you take the commute away, it opens up a whole new suite of options.”

The arrows on the adjacent map show where respondents who are currently living in Ottawa’s largest communities would like to live if they were to move in the next five years.

For example, nine per cent of those respondents who currently live in central Ottawa say they would move to a community just outside the city while eight per cent say they would move to the suburbs inside the Greenbelt.

20 THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021

10%

SUBURB (OUTSIDE

8%

EVEN FURTHER AFIELD

WWW.OTTAWABUSINESSSURVEYREPORT.CA

RESIDENTIAL REAL ESTATE

CENTRAL OTTAWA

8% A RURAL COMMUNITY BEYOND OTTAWA’S BORDERS

15% 8% SUBURBAN OTTAWA (INSIDE GREENBELT)

12% 11%

BAN OTTAWA E GREENBELT)

NEIGHBOURHOOD APPEAL If you were to move homes in the next five years, what geographic area would hold the most appeal?

LIFESTYLE FACTORS OUTDOOR SPACE AFFORDABILITY NEIGHBOURHOOD AMENITIES (The coloured dots indicate the top factors, in order, that would motivate respondents to live in each area.

“A larger home,” “Locate closer to family” and “Locate closer to work” were also response options.)

WWW.OTTAWABUSINESSSURVEYREPORT.CA

Central Ottawa

29%

A community just outside of Ottawa

19%

Suburban Ottawa, inside the Greenbelt

17%

Suburban Ottawa, outside the Greenbelt

15%

A rural community beyond Ottawa’s borders

12%

Even further away

8% THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021 21

DISCRETIONARY SPENDING

OTTAWA RESIDENTS PLANNING HOLIDAYS CLOSE TO HOME With opportunities for international travel still limited, nearly half of respondents to the Welch LLP Ottawa Business Growth Survey say they plan to spend their vacation time in the National Capital Region – either relaxing at home or visiting local attractions.

Bars, restaurants and speciality retailers are poised to be the biggest beneficiaries of local residents spending their discretionary income on staycations.

Relatively few respondents say they plan to fly to a vacation destination – reinforcing expectations that it will take several years for passenger volumes at the Ottawa airport to recover to pre-pandemic levels.

How will you use the bulk of your vacation time this year?

26% A STAYCATION INVOLVING OUTINGS TO LOCAL ATTRACTIONS

25%

19%

ROADTRIP WITHIN CANADA

SPEND SOME DOWNTIME AT HOME

5% TRAVEL TO A DOMESTIC DESTINATION VIA AIRPLANE

5% I’LL BANK MY VACATION TIME

7% TRAVEL TO THE U.S. OR OTHER COUNTRY VIA AIRPLANE

12% I DON’T TAKE VACATIONS

Assuming that the economy largely reopens this summer, to what extent will you spend your personal discretionary income in the following ways? Figures show the percentage of respondents who said “some” or “a lot.”

BARS AND RESTAURANTS

53% VACATION RENTALS, SUCH AS COTTAGES

36% 22 THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021

SHOPPING AT LOCAL SPECIALTY RETAILERS

49% ATTRACTIONS, SUCH AS MUSEUMS

20%

GOLF COURSES AND OTHER OUTDOOR RECREATION VENUES

44% CONCERTS AND FESTIVALS

20% WWW.OTTAWABUSINESSSURVEYREPORT.CA

THE POST-PANDEMIC ECONOMY • EMPLOYEE PRODUCTIVITY • WORKING FROM HOME • HIRING REMOTE WORKERS • BUSINESS INVESTMENTS • EXIT PLANNING • PUBLIC POLICY PRIORITIES • EVALUATING GOVERNMENT RESPONSES TO COVID-19

WWW.OTTAWABUSINESSSURVEYREPORT.CA

THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021 23

REMOTE WORK

OPTIMIZING THE WORK-FROM-HOME ENVIRONMENT The shift to virtual meetings and working from home has affected various workers differently.

While some have increased their productivity by cutting out long commutes to the office or client meetings, others are finding it harder to focus amid distractions from family members or makeshift home office setups.

With many employees still working remotely, the majority of survey respondents say their organization is looking to support their staff in various ways, primarily through giving employees more flexibility around their work schedules.

How has employee productivity at your organization changed during the pandemic?

25% MORE PRODUCTIVE

43% THE SAME

32% LESS PRODUCTIVE

How is your organization assisting employees working from home? (check all that apply)

49% MORE FLEXIBLE HOURS

10% CASH ALLOWANCE TO COVER INTERNET OR UTILITY BILLS

34% PROVIDING OFFICE TOOLS SUCH AS CHAIRS OR DESKS

31% HOSTING VIRTUAL SOCIAL EVENTS WITH CO-WORKERS

7% ADDITIONAL TIME OFF

13% NEW OR ENHANCED EMPLOYEE WELLNESS PROGRAMS AND BENEFITS

7% PERKS SUCH AS MEAL DELIVERIES

39% NONE OF THESE

Rethinking employee engagement The switch to remote work forced many managers to find new ways of engaging and evaluating the performance of their staff. While some employers attempted to apply their old models to a virtual world, others looked to refine their internal operations.

“Many companies tried to take their day-to-day

operations and simply adapt them for remote work without realizing the opportunity in front of them,” says Dana Brown, dean of Carleton University’s Sprott School of Business. “Now is the time to rethink your style of work to improve productivity and employee happiness.”

The traditional nine-to-

24 THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021

five managerial mindset – measuring someone’s productivity by how long they sit at their desk – is increasingly seen as ineffective. Managers are now looking at measuring outcomes rather than hours as well as giving employees more flexibility to get the job done in a time frame that works for them, adds Brown.

Employers are also trying to be more strategic in how they engage employees, such as limiting the number of virtual meetings to avoid strain and Zoom fatigue.

“The workplace is going to look different and businesses shouldn’t take that lightly,” says Brown. “We’ve survived these different modes of working, so now we need to ask ourselves: What lessons do we want to take forward?”

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REMOTE WORK

EMPLOYEES LOOK TO SPLIT TIME BETWEEN HOME, OFFICE With many employees – and their managers – realizing they can be just as productive working remotely, survey respondents collectively predict that they will divide their time between home and the office once the health risks of COVID-19 subsides.

What percentage of your time working do you think you’ll spend at the following locations?

A TRADITIONAL OFFICE OR OTHER COMMERCIAL SPACE

COWORKING SPACE OR OTHER SHARED COMMERCIAL PREMISE

HOME

49%

47%

3%

HIRING PERMANENTLY REMOTE WORKERS The shift to remote work has opened new opportunities for some employers to bypass Ottawa’s tight market for skilled labour and hire employees who live outside the National Capital Region.

While it’s an approach that’s being embraced by a growing number of businesses, a slight majority of respondents to the Welch LLP Ottawa Business Growth Survey say their organization still requires staff to live in the region.

Has your organization’s approach to hiring employees living outside the region changed during the pandemic?

13%

53%

YES, WE’VE HIRED AN EMPLOYEE WHO WORKS REMOTELY LIVING OUTSIDE THE REGION

NO, MY ORGANIZATION REQUIRES EMPLOYEES TO LIVE IN THE REGION

20%

14% YES, WE’LL CONSIDER CANDIDATES WHO LIVE OUTSIDE THE REGION AND WOULD WORK FOR US REMOTELY THE NEXT TIME WE’RE HIRING

NO, MY ORGANIZATION ALREADY EMPLOYED REMOTE WORKERS BASED OUTSIDE THE REGION PRIOR TO THE PANDEMIC

Managing a pandemic workforce As businesses across the city prepare for a return to the office, many employees are exploring hybrid work models.

Most survey respondents say they would like to split their schedule equally between home and the office, favouring a flexible work arrangement, when the serious health risks of COVID-19 subside.

Managing a hybrid team WWW.OTTAWABUSINESSSURVEYREPORT.CA

can be challenging, especially if some employees prefer to work from home on a more permanent basis when their employer sees value in having them physically at the office, says Joël Dubois, a partner at law firm Perley-Robertson, Hill & McDougall.

“Unless there was a condition in the employment agreement stating an employee can work remotely,

the employer has the right to recall staff to the office,” he says. “My recommendation to clients is to always regularly update your workplace policy to try and avoid any confusion or conflict.”

While employers have navigated several operational issues and questions surrounding virtual work – such as whether employees can be mandated to turn

their cameras on in a meeting – vaccines will likely be the centre of attention for businesses going forward.

“Mandating vaccines brings up a lot of privacy concerns and human rights questions that no one has a clear answer to right now,” adds Dubois. “It will probably be different in unionized versus non-unionized work environments as well, which adds to the complexity of the situation.”

THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021 25

EVOLVING OPERATING MODELS

INVESTMENTS FOR GROWTH Respondents to the Welch LLP Ottawa Business Growth Survey say their organizations are eager to bring their products and services to market and say they plan to prioritize investments in sales, marketing and business development.

As the economy stabilizes, where is your organization most likely to make a financial investment to position it for growth?

1 4

25%

SALES AND BUSINESS DEVELOPMENT

15%

IT, BACK-END SOFTWARE OR OTHER INTERNAL SYSTEMS

2 5

22%

MARKETING

13%

TRAINING/ SKILLS UPGRADE FOR EXISTING EMPLOYEES

3 6

18% PRODUCT/SERVICE DEVELOPMENT

7%

PERKS, BENEFITS AND OTHER INITIATIVES TO BOOST EMPLOYEE MORALE AND RETENTION

MAKING VIRTUAL CONNECTIONS More than a year after virtually all in-person networking events, conferences and other business events were put on hold, virtual substitutes are still largely seen as a makeshift solution by most survey respondents.

To what extent have you been able to switch to virtual ways of connecting, such as through LinkedIn and online events, for...

51%

49%

47% 36% 26%

18%

21%

FINDING SALES PROSPECTS AND LEADS n NOT AT ALL - IT’S TOTALLY INEFFECTIVE

10% LEARNING AND PROFESSIONAL DEVELOPMENT n SOMEWHAT - IT’S A MAKESHIFT SOLUTION

26 THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021

17%

NETWORKING

n COMPLETELY - IT’S AS GOOD OR BETTER

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THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021 27

EXIT PLANNING

BUSINESS OWNERS DELAYING EXIT TIMELINES The COVID-19 pandemic has upended the plans of many business owners considering an exit. While the changing landscape has some looking to accelerate their exit, most say it’s delayed their plans.

Among those respondents who see an exit on the horizon, most believe it is at least six years or more away.

When do you plan on exiting your business?

14%

17%

25%

<3 YEARS

3-5 YEARS

6+ YEARS

27% NOT PLANNING TO EXIT

16% NOT APPLICABLE / UNSURE

How has COVID-19 affected your exit plans?

IT’S PUSHED MY ANTICIPATED EXIT DATE FURTHER OUT INTO THE FUTURE GROWTH HAS INCREASED OUR VALUATION, MAKING AN EXTERNAL SALE MORE ATTRACTIVE CHALLENGES OBTAINING CREDIT OR OTHER FINANCING HAVE ME CONSIDERING BANKRUPTCY OR WINDING DOWN THE BUSINESS CASH-FLOW CHALLENGES CAUSED BY THE PANDEMIC HAS MADE AN EXTERNAL SALE MORE ATTRACTIVE

IT HASN’T CHANGED MY EXIT PLAN NOT APPLICABLE

Selling or exiting a business is typically the culmination of several years of planning – efforts that, in many cases, have been upended by the COVID-19 pandemic.

The pandemic has not impacted all industries equally, such that an exit plan for a company in a struggling industry may be very tenuous, whereas other companies may now have enhanced exit

opportunities, says Jim McConnery, managing partner at Welch LLP. “COVID-19 derailed the plans for some business owners to exit in 2020 or 2021,” he says. “This can include scenarios where a lower purchase price is in play, or a seller may absorb some risk via more extensive use of earnouts.”

Some deals are structured so that part of the sale

28 THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021

2% 4% 42% 25%

OTHER

Planning for the future

17% 6% 5%

proceeds is contingent on the success of the company postsale. Commonly referred to as an earnout, it means that some part of the purchase price may not be collected if the company does not meet revenue or profit targets.

This effectively shifts some of the transaction risk from the buyer to the seller. Earnouts are not new, however, they will see increased use as parties negotiate deal terms in uncertain times.

“Companies that have performed well or better during COVID-19, with an increase in revenue or profitability, and who are looking to sell, have found themselves in a fortunate position,” says McConnery.

“A combination of a scarcity of deals and excess capital have driven up valuations.

A popular view is that M&A activity will be robust in 2021, as companies recalibrate for a post-COVID business environment.”

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WWW.OTTAWABUSINESSSURVEYREPORT.CA

THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021 29

ECONOMIC RECOVERY

BUSINESS LEADERS PRIORITIZE MANUFACTURING CAPABILITIES Following a year of supply chain disruptions and headlines highlighting Canada’s dependence on its trading partners for personal protective equipment and vaccines, respondents to the Welch LLP Ottawa Business Growth Survey believe that policymakers should prioritize strengthening the country’s manufacturing base.

Where should policymakers place their focus to help build a more resilient post-pandemic economy? (select two)

1

2

3

INCREASING DOMESTIC MANUFACTURING CAPABILITIES 55%

GREATER INVESTMENT IN HEALTH CARE AND MEDICAL RESEARCH 37%

RETRAINING AND EDUCATION 32%

MODERNIZING SOCIAL SAFETY PROGRAMS, SUCH AS EMPLOYMENT INSURANCE AND PAID SICK LEAVE 25%

4

5

6

Creating resilient workplaces As businesses look to build back better, employee support programs and mental health initiatives should be top of mind for employers, according to a leading local business advocate.

The pandemic introduced a host of new stresses that many employees and business owners alike were forced to confront on their own, says Lise Sarazin, director general of Regroupement des gens

d’affaires de la Capitale nationale (RGA), an Ottawabased business advocacy organization.

While it’s difficult for policymakers to design financial or other support packages that meet all the diverse needs of companies in different sectors, virtually all businesses have one thing in common: employees. This is where leaders should be focusing their efforts, argues Sarazin.

“Businesses will

30 THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021

ACCELERATED SHIFT TO A DIGITAL ECONOMY 37%

be relying on their HR departments more than ever to find solutions to deal with stress, anxiety and depression,” she says. “They will need outside support to ensure they can manage that workload.”

Elsewhere, businesses will also be relying on government leaders to advocate for better external market access, says Sueling Ching, president and CEO of the Ottawa Board of Trade.

In Canada, business

INCREASING IMMIGRATION TO CANADA 15%

owners are calling for less interprovincial trade barriers to make it easier for them to create partnerships and access a broader customer base.

Local retailers are also looking beyond the country’s borders to access the international market.

“Businesses will be looking at how they can amplify, diversify and scale up their sales opportunities,” she says.

“Accessing external markets will help drive these companies forward.”

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This year, your workplace can make a difference through: •

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•

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Your support will inspire your staff, promote your company’s philanthropic identity, and provide critical funding to local cancer research projects, clinical trials, and Cancer Coaching services.

REAL community CHANGE starts in YOUR WORKPLACE. To learn more, contact Paula Muldoon, Vice-President of Development and Community Engagement at the Ottawa Regional Cancer Foundation.

613-247-1920 x.258 | paula@ottawacancer.ca Proud supporters of the Ottawa Regional Cancer Foundation WWW.OTTAWABUSINESSSURVEYREPORT.CA

THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021 31

COVID-19 RESPONSE

OPINIONS DIVIDED ON GOVERNMENTS’ PERFORMANCE Ottawa’s local political and business leaders have done a more effective job at controlling the spread of COVID-19 and positioning the economy for a quick recovery than either the provincial or federal governments, respondents to the Welch LLP Ottawa Business Growth Survey say.

“There’s been frustrations with the federal government around vaccine expectations, and with the provincial government over its mixed messages surrounding public health restrictions,” observes Abacus Data CEO David Coletto. “That same level of frustration hasn’t been there with the local government.”

On the economic front, Coletto notes the federal government implemented several financial support programs in the early days of the pandemic faster than many observers would have thought possible. A year later, however, he suggests that some in the business community are likely to be uncomfortable with the large deficits that the federal Liberals are projected to run in the coming years, even after the economy recovers.

How would you rate the job done by the following groups in controlling the spread of COVID-19? n VERY GOOD

n GOOD

n ADEQUATE

INDIVIDUAL RESIDENTS AND BUSINESSES

THE FEDERAL GOVERNMENT

n VERY BAD

19%

THE CITY OF OTTAWA AND OTTAWA PUBLIC HEALTH THE PROVINCIAL GOVERNMENT

n BAD

37%

30%

36%

22% 7%

31%

12%

27%

11%

24%

13%

4%

22%

30% 25%

2%

10% 17%

19%

How would you rate the job done by the following groups in positioning the economy for a quick recovery? n VERY GOOD

n GOOD

n ADEQUATE

INDIVIDUAL RESIDENTS AND BUSINESSES

7%

THE PROVINCIAL GOVERNMENT

7% 12%

n VERY BAD

25%

17%

37%

32% 27%

8%

40%

40%

10%

THE CITY OF OTTAWA AND OTTAWA PUBLIC HEALTH UNIT

THE FEDERAL GOVERNMENT

n BAD

23%

36% 24%

21%

1%

7% 8%

17%

Increased stimulus relief for local businesses While opinions are divided on how well the federal government has performed throughout the last year, the Liberals’ spring budget contained some positive news for local businesses, says Jim McConnery, managing partner at Welch LLP.

“The government is providing some pretty strong ongoing stimulus for the business community, which sets us up for strong economic growth,” he says.

“The big concern, however, is they are not articulating a game plan or a framework as to how they get back to

32 THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021

balanced budgets in the future.”

In the short term, McConnery notes Ottawa’s economy is primed for growth in 2021 and 2022 with so much pent-up demand from consumers.

“Even in the absence of more government stimulus,

there’s a belief that the economy would probably perform relatively well as we emerge from this lockdown-type environment,” he says. “Consumers are going to drive more and more spending, which is very positive for the business community.”

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THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021 33

MUNICIPAL AFFAIRS

WATSON RETAINS APPROVAL RATING THROUGHOUT PANDEMIC Ottawa Mayor Jim Watson continues to maintain support from the city’s business community with an approval rating that’s remained consistently positive throughout his recent terms in office.

Abacus Data CEO David Coletto says Watson has provided steady leadership throughout the crisis and has been a vocal advocate for the city’s business community. He notes that during the pandemic, the mayor pushed back against provincial COVID-19 measures when they appeared to be disproportionate or inconsistent with the situation in Ottawa.

Do you approve or disapprove of the performance of Mayor Jim Watson?

18%

n STRONGLY APPROVE

34%

n APPROVE

9%

n DISAPPROVE

11%

n STRONGLY DISAPPROVE

24%

n NEUTRAL

5%

n UNSURE

PARKING, SPECIAL EVENTS KEY FOR BOLSTERING BYWARD MARKET As the city embarks on a $129-million plan to revitalize the ByWard Market, respondents say improved parking and more special events such as festivals would help draw more visitors and tourists.

On the issue of parking, however, the priorities of survey respondents appear to be at odds with those of civic officials.

The city’s current vision for the Market calls for a more walkable, less traffic-congested neighbourhood. There are plans to demolish the Clarence Street parking garage to make way for a new “destination building” and civic square.

What are the most important long-term considerations to draw more visitors to the ByWard Market?

1

2 3

MORE ACCESSIBLE PRIVATE VEHICLE PARKING, EITHER IN THE MARKET OR ON ITS PERIPHERY 39%

MORE SPECIAL EVENTS, FESTIVALS AND OTHER PROGRAMMING 38%

IMPROVED SAFETY AND SECURITY 33%

4 5 6 MORE DIVERSE RETAIL MIX 33%

34 THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021

MORE SPACE FOR BAR AND RESTAURANT PATIOS 29%

MORE PEDESTRIAN PLAZAS 28%

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RESPONDENT PROFILES

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THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021 35

RESPONDENT PROFILES

WHO TOOK THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY? Some 562 business leaders from across the National Capital Region participated in the 2021 Welch LLP Ottawa Business Growth Survey, representing all of the area’s major industries.

The majority of respondents held senior executive roles in privately held companies, ranging in size from owner-operated ventures to organizations with more than 150 employees.

The Welch LLP Ottawa Business Growth Survey was administered online from March 1 to April 11 by Abacus Data, a leading Ottawa-based research and strategy firm.

Respondents were recruited by email and website intercept by the Ottawa Business Journal, Ottawa Board of Trade and Welch LLP. Members of BIAs from across Ottawa, as well as several leading industry organizations, were also invited to participate.

What industry does your organization operate in?

4% BANKING AND FINANCIAL SERVICES

13% OTHER 4% NOT-FOR-PROFIT / ASSOCIATION

27% PROFESSIONAL SERVICES

2% MUSEUMS, SCHOOLS, UNIVERSITIES AND COLLEGES 9% TRAVEL, TOURISM AND HOSPITALITY 0.5% ARTS

4% CONSTRUCTION

7% HEALTH AND WELLNESS

4% REAL ESTATE 11% RETAIL

9% TECHNOLOGY

5% MANUFACTURING AND LOGISTICS

0.5% AEROSPACE AND DEFENCE

Is your organization a...

NOT-FOR-PROFIT 6% PRIVATE COMPANY

84%

PUBLIC COMPANY 5% GOVERNMENT AGENCY 1% CROWN CORPORATION 1% GOVERNMENT DEPARTMENT 1%

36 THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021

WWW.OTTAWABUSINESSSURVEYREPORT.CA

How many employees does your organization have?

What is your position in the business?

4% OTHER

29%

9% MANAGER 4% DIRECTOR 15%

13%

7% VICE-PRESIDENT

12%

8%

5%

8% PARTNER 4% PRESIDENT/CEO (NON-OWNER)

1-5

6-10

11-20

21-50

51-75

7%

76-149

EMPLOYEES 63% PRESIDENT / CEO AND OWNER

OWNER/OPERATOR

Respondents to the 2021 Welch LLP Ottawa Business Growth Survey come from a variety of industries and geographic communities, with many self-identifying as belonging to one of Ottawa’s business improvement areas (BIAs) and/or business organizations:

The Ottawa Board of Trade The Ottawa Construction Canadian Federation of Association Independent Business (CFIB)

The Family Enterprise Xchange

(formerly CAFE - the Canadian Association of Family Enterprise)

Regroupement des gens d’affaires de la Capitale nationale (RGA) Building Owners and Managers Association National Capital Heavy Construction Association

Better Business Bureau

2%

5%

1%

4%

4%

3%

4%

6%

12%

PRESTON STREET BIA

WESTBORO VILLAGE BIA

MANOTICK BIA

VANIER (QUARTIER VANIER) BIA

KANATA CENTRAL BIA

OTHER

CARP ROAD CORRIDOR

3%

DOWNTOWN RIDEAU BIA

GLEBE BIA

WWW.OTTAWABUSINESSSURVEYREPORT.CA

13%

BYWARD MARKET

KANATA NORTH BIA

16%

SPARKS STREET

2%

HEART OF ORLEANS

9%

BARRHAVEN BIA

12%

BANK STREET BIA

6% WELLINGTON WEST BIA

What organization do you belong to?

THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021 37

INDEX

WELCH LLP OTTAWA BUSINESS GROWTH SURVEY: QUESTIONS AT A GLANCE BUSINESS CONFIDENCE INDEX 11

Compared to a year ago, how has your confidence in the local economy changed?

How has your revenue changed in the last fiscal year?

12

How has your net income changed in the last fiscal year?

12

Do you plan to hire more employees, keep your staff numbers stable or reduce your headcount?

13

Is credit harder, easier or about the same to access?

13

How will the market for your business sector change over the next year?

14

CHANGING HOW WE LIVE, WORK AND PLAY How will your organization’s office, retail or other commercial space footprint change?

16

What are your organization’s priorities for its commercial real estate space?

18

What geographic area holds the most appeal if you were to move homes?

20

What would motivate you to consider moving to a new neighbourhood?

21

How will you use the bulk of your vacation time this year?

22

How will you spend your discretionary income this summer?

22

THE POST-PANDEMIC ECONOMY How has employee productivity at your organization changed during the pandemic?

24

How is your organization assisting employees working from home?

24

How will you divide your working time between home and the office post-pandemic?

25

Has your organization’s approach to hiring employees living outside the region changed during the pandemic?

25

As the economy stabilizes, where is your organization most likely to make a financial investment to position it for growth?

26

To what extent have you been able to switch to virtual ways of connecting for sales, networking and professional development purposes? 26 When do you plan on exiting your business?

28

How has COVID-19 affected your exit plans?

28

Where should policymakers place their focus to help build a more resilient post-pandemic economy?

30

How would you rate the job done by each level of government in controlling the spread of COVID-19?

32

How would you rate the job done by each level of government in positioning the economy for a quick recovery?

32

Do you approve or disapprove of the performance of Mayor Jim Watson?

34

What are the most important long-term considerations to draw more visitors to the ByWard Market?

34

38 THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021

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THE WELCH LLP OTTAWA BUSINESS GROWTH SURVEY 2021 39

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